Humber/Ontario Real Estate Course 2 Exam Practice

If a buyer cannot qualify for a mortgage and wants the deposit back, what action can the brokerage take?

1. The brokerage releases the deposit on request from one party.

2. The brokerage releases the deposit with consent from both parties.

3. The brokerage sends the deposit back automatically.

4. The broker of record decides on the release of the funds.

5. No action is required by the brokerage.

6. The brokerage needs no written authorization for deposit release.

The correct answer is: The brokerage releases the deposit with consent from both parties.

In this scenario, the correct action for the brokerage to take when a buyer cannot qualify for a mortgage and requests the deposit back is to release the deposit with consent from both parties (option B). This process ensures that both the buyer and the seller agree to the return of the deposit, mitigating any potential disputes or legal issues. Options A, C, D, E, and F are not the appropriate actions for the brokerage to take in this situation. Released the deposit on request from one party (option A) can lead to conflicts between the buyer and seller. Sending the deposit back automatically (option C) or having the broker of record decide on the release of funds (option D) without both parties' consent can raise legal concerns and may violate the terms of the agreement. No action required by the brokerage (option E) is incorrect as the brokerage has a responsibility to facilitate the return of the deposit. Lastly, stating that the brokerage needs no written authorization for the deposit release (option F) could lead to misunderstandings or disagreements between the parties involved. Therefore, the best course of action to ensure a smooth and fair process is to release the deposit with consent from both parties, as indicated in option B.